2013 (11) TMI 1458 - AT - Service Tax

Demand of service tax - Business Auxilliary service - Manpower Recruitment or Supply Agency - Intellectual Property- Held that - petitioner received royalty from the newspaper - Business Standard for publishing the petitioner s journal Indian Management . The petitioner had already remitted 10% of the value received under this head towards service tax, under the category intellectual property service - Prima facie that the conclusion as to the petitioner having provided Business Auxiliary Service is both erroneous and inadequately reasoned in the adjudication order; substantial amount of service tax has been paid in so far as intellectual property service is concerned; and in respect of Manpower Recruitment or Agency Service, service tax was remitted by the petitioner under a different category, of Management and Consultancy service. We do not find a strong prima facie case in so far as intellectual property service is concerned - Assessee directed to make a pre deposit - Partial stay granted.

Issues:
1. Assessment of service tax liability for Business Auxiliary Service.
2. Assessment of liability for Club or Association service.
3. Assessment of liability for Manpower Recruitment or Agency Service.
4. Assessment of liability for Intellectual Property Service.

Business Auxiliary Service:
The appellant appealed against an order confirming a service tax demand for various services provided. The major component of the demand was related to Business Auxiliary Service. The appellant conducted Management Aptitude Test (MAT) where fees were collected from candidates, and institutes recognized the certification provided by the appellant. The adjudicating authority concluded that the consideration received from candidates for MAT examinations constituted a value received from Business Auxiliary Service. However, the appellant argued that the service provided was not on behalf of the institutes, and no consideration was received from them. The adjudicating authority failed to provide a breakdown of amounts received for different components of Business Auxiliary Service, making the assessment unsustainable.

Club or Association Service:
The appellant contested the assessment of liability for Club or Association service, citing various court judgments supporting their position that service provided to members would not amount to service provided to another. The demand under this head was Rs.69,47,830. While the decisions supported the appellant's contention, the Tribunal had been insisting on a pre-deposit even in similar cases, indicating a nominal amount might be required.

Manpower Recruitment or Agency Service:
The appellant designed recruitment tests for agencies like Air India and FCI, screening prospective employees for recruitment. The fee received for these services was considered taxable. The appellant had remitted service tax under a different category, Management Consultancy service, instead of Manpower Recruitment or Agency Service. The adjudication order lacked particulars or analysis on this aspect, raising concerns about the accuracy of the assessment.

Intellectual Property Service:
The appellant received royalty from a newspaper for publishing a journal. The appellant had already remitted 10% of the value received under this head towards service tax. The Tribunal found the conclusion on Business Auxiliary Service erroneous and inadequately reasoned. A substantial amount of service tax had been paid for intellectual property service. The Tribunal granted a waiver of pre-deposit for the adjudicated liability and stayed further proceedings, requiring the appellant to remit the balance service tax due on intellectual property service within three weeks to avoid appeal rejection.

In conclusion, the judgment addressed various issues related to service tax liabilities for different services provided by the appellant, highlighting discrepancies in the assessment and providing relief in some instances based on the evidence and legal arguments presented.

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